The National Growth Fund, which is a key policy initiative of the Lee Jae-myung administration, will debut by the end of 2025 with 10 trillion won ($7.2 billion) in public funds. The remaining 75 trillion won in private-sector funds that was initially planned will be raised gradually under a “full-matching” scheme, with contributions made alongside each investment project rather than collected upfront to ease burdens on financial institutions.

According to the financial sector on Thursday, the Financial Services Commission (FSC) plans to secure 10 trillion won in initial capital for the fund by December 2025 via contributions from Korea Development Bank (KDB) and government-guaranteed bond issuance. KDB will provide 2 trillion won, while around 8 trillion won will be raised through fund bonds. An additional 1 trillion won in government fiscal support will be injected via the 2026 budget to strengthen subordinated capital. The public-sector contribution is expected to grow to 75 trillion won over the next five years, with the fund eventually totaling 150 trillion won when combined with private capital.

The 75 trillion won in private-sector funding will be committed case by case, matching half of each confirmed investment. If a 10 trillion won project is approved, for example, 5 trillion won will come from the public fund while the remaining 5 trillion won will be matched by private investors. The expected sources of private funding include commercial banks, pension funds, surplus capital from financial institutions such as Korea Securities Depository, Korea Securities Finance, and Korea Exchange, as well as venture capital from investment firms. Secondary financial institutions are likely to be excluded.

Authorities aim to make the fund’s “first investment” in early 2026, with an FSC official noting that they are “seeking a project with strong symbolic value.” Incentives, including easing restrictions on corporate venture capital (CVC) investments for those involved in the fund, are also being considered. CVCs are venture capital entities established by companies to invest in startups.

However, critics point out that under the current Fair Trade Act, external contributions to CVCs are capped at 40 percent of total equity and thus limits venture capital’s availability.